Huge freebies announced by four poll-bound states, Madhya Pradesh, Rajasthan, Chhattisgarh and Telangana, are likely to bring extra disposable income worth about Rs 70,000 crore in millions of households in the current fiscal year, according to industry estimates.

These welfare schemes and freebies, which include monthly allowances for women and youngsters, debt relief for farmers, free housing for the needy, subsidies for gas cylinders and compensation for animal loss, have been rolled out recently by the incumbent governments ahead of elections that are due year-end.

“Sample this. Madhya Pradesh launched Laadli Behna Yojana three months ago that offers Rs 1250/month to 1.31 crore women. The state is giving cylinders at Rs 450 to 84 lakh gas connection holders from this September. Over 9 lakh youngsters get a stipend of Rs 8,000 to Rs 10,000 every month under Learn Earn Scheme,” says an executive of a leading daily.

All these freebies are likely to generate extra disposable income of about Rs 3,000 crore in the state every month which corresponds to Rs 36,000 crore annually, he stated.

Similarly, Rajasthan has launched Indira Gandhi Gas Cylinder Scheme and Free mobile scheme for women (Rs 6800 for mobile phone and data pack), compensation for cows dying of Lumpi disease (Rs 40,000) and fuel surcharge waiver for electricity consumers. The state consumers are having over Rs 1075 crore of additional disposable income per month which corresponds to over Rs 12,800 crore per year.

Chhattisgarh has come up with an Unemployment Allowance Scheme under which Rs 2500/month is being given to 10 lakh unemployed youths. Over 36 lakh farmers get Rs 12,638 each for taking other crops besides paddy. Then there is annual assistance of Rs 6000 for workers. In all, people would have Rs 645 crore per month in their hands, which means Rs 7,735 crore in the year.

These welfare schemes have the potential to lift rural consumption and result in more media spending, says Lloyd Mathias, Business Strategist and Independent Director.

Brands that operate in smartphones, computers, consumer durables, FMCG, fashion and personal care and jewellery segments are ready to cash in on the positive consumer sentiments.

Parle Products, for instance, has planned to spend more in the election-bound states. This spending is over and above festive spending. Mayank Shah, Senior Category Head, Parle Products, told e4m, “Freebies always help lift sentiments of rural consumers resulting in higher consumption. As far as AdEx is concerned, both the halves of the financial year remain almost the same for us as we invest in IPL as well. However, we would spend more in the poll-bound states as people have extra disposable income.”

Shah explains that the free ration scheme, which was launched during the Covid pandemic and still continues, has helped FMCG firms to sustain so far despite economic crisis and inflation. “People’s basic needs are taken care of with such a scheme. Then they are able to purchase semi-essentials and non-essential goods as well.”

The Chief Marketing Officer of a leading smartphone brand, echoed the sentiments. “When people get extra cash in their accounts, their capacity and willingness to take loans for discretionary spends goes up. With cash incentives from states, women will buy smartphones and youngsters will buy laptops and tablets. We are hopeful of having a good H2 this time driven by sales in MP, Rajasthan and Chhattisgarh.”

Hindi media to get lion’s share

Hindi newspapers and TV channels, both news and entertainment, are expected to get the lion’s share of advertisements that brands are likely to pour into these regions.

Advertisements have in fact started pouring in as soon as the schemes were announced. Political advertisements have also begun even as the Election Commission is yet to announce the polling dates, Hindi newspapers and TV channels that operate in those regions told e4m.

Print delivers best of the eyeballs for the state political parties, asserts Sumit Modi- Chief Operating Officer -DB Corp, Madhya Pradesh. He noted “We have been registering strong double-digit growth in advertising for the last 1.5 years. The growth has come on the back of almost 100% growth in real estate, education, jewellery and government categories. The automobile category, which has been weak for the last 3-4 years, has now shown signs of growth on account of new launches especially electric vehicles such as 2-wheelers and 4- wheelers.”

10-15 percent AdEx growth expected

India’s ad market remained dull in the first half of 2023 due to rising inflation and prevailing funding winters that impacted the startup ecosystem. However, the second half is expected to bring cheers in the market for triple reasons-elections, festive season and the ICC world cup-which will negate the inflation impact, says Karan Taurani, Senior VP and Research Analyst, Elara Capital.

Brands are expected to spend 10-15 percent additional advertising revenues in these states. Parle Products, for instance, would spend 10-15 percent more in advertising in these states, Shah confirmed.

Ashish Sehgal, Chief Growth Officer, Advertisement Revenue at Zee Entertainment Enterprises, said, “Traditionally, election- bound states help lift the ad markets due to freebies rolled out by the governments. Market has already picked up. We are hoping to earn 10-12 percent more ad revenues in these states in the next few months. Festivals and cricket world cup would further lift the ad market which was witnessing a slump due to inflation.”